July Market Recap
Stocks powered higher in July driven by optimism from trade agreements and economic data, but that optimism faded a bit as the calendar turned to August.
The July jobs report released on August 1 showed payrolls expanded by 73,000, below the consensus estimate of 100,000. In addition, prior months were significantly revised down. June’s number was lowered from 147,000 to 14,000; May’s dropped from 125,000 to 19,000.
President Trump’s August 1st deadline for trade deals led to an executive order with updated duties ranging from 10%-41%. Likely most surprising to the market was the increased rate for Canada, one of the U.S.’ biggest trading partners. Imports from our northern neighbor will now have a 35% levy, up from 25%.
August 1st headlines will likely make life more difficult for the Federal Reserve. The Fed kept rates steady at its July 30 meeting. Fed Chair Jerome Powell said the risk of inflation from the administration’s trade policy remains too high for the central bank to cut interest rates. The Fed next meets in September and will have to weigh weakening employment data with the updated inflation readings.
The most recent inflation numbers showed a 0.3% increase in June, putting the 12-month CPI rate at 2.7%, in line with expectations. Economists believe tariffs are slowly working their way into the numbers, but the increase wasn’t as big as many feared.
The economy grew at a faster pace than expected in the second quarter as consumer spending rose. That was reflective in Q2 corporate earnings released in July. According to FactSet, 80% of reporting companies have beaten their earnings estimates.
Investors cheered the positive data and the trade agreements reached with Japan and Europe by buying stocks in July. The Technology sector continued its best-sector-streak to 4 months with a 5.16% increase. Healthcare was the worst sector of July (-3.44%) and the worst of 2025.
Benchmark Returns: July 2025 | YTD 2025
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Dow Jones
|
S&P 500
|
NASDAQ
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+0.08% | +3.73%
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+2.17% | +7.78%
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+3.70% | +9.38%
|
|---|
Investors’ excitement over tech stocks showed signs of bubbling into exuberance in July. The Nasdaq is currently on its second longest stretch above the 20-day moving average in its history, with the only longer streak dating back to 1999. In addition, investors are using borrowed money to buy stocks at a near record pace. According to Deutsche Bank, margin debt (measured when an investor borrows cash against the stock he/she owns to buy more stock) now exceeds levels last seen in 2007 and 2000.
The US dollar, which suffered its worst 6 months since 1973, had its first positive month of 2025 as trade uncertainty eased. The dollar’s strength negatively affected international stocks with the EAFE down 1.40%.
Bond yields moved slightly higher. Ten-year US Treasury yields ended July at 4.36%, up from 4.25% a month earlier.
Ben Marks
Chief Investment Officer
Brett Angel
Senior Wealth Advisor
Investment Advice offered through Marks Group Wealth Management, a Registered Investment Advisor.
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